Barbados Economy History

In the last 300 plus years, the mainstay of the Barbados economy has gone full circle from agriculture to services.

Back in 1627 when the British colonized Barbados, the main income earners were cotton and tobacco. Not long after that, the Brazilians introduced sugar cane into Barbados and for years it was the main money earner.

Used for the production of rum and as an export to Europe, sugar cane became the primary wealth generator for Barbados. It was also the reason that West African slaves were transported to Barbados – to work the sugar plantations. Sugar was even used as currency in bartering.

The 1920’s and 1930’s brought trade unions to Barbados, but the Great Depression that struck the world during this time created large-scale unemployment and poverty on the island.

The rise of tourism after World War II proved to be a new money maker for Barbados and its neighbors.

In 1961, a new Deep Water Harbour was completed in Barbados, allowing ocean cargo vessels and cruise ships access to port facilities and a safe harbor.

Barbados gained independence five years later in 1966 by which time it had become a ‘globally upper-middle-income economy’ which was no longer dependent only on sugar cane.

In post-independence Barbados, the government diversified the economy, stimulated tourism and developed a manufacturing sector that helped propel economic growth.

Visitors from Canada and the United Kingdom helped to develop the tourism industry.

By the 1970’s international companies became increasingly interested in Barbados.

In 1972 the Central Bank of Barbados was formed, breaking ties with the East Caribbean Currency Authority and in 1975 the Barbados dollar was changed to reflect a consistent exchange rate with that of the United States dollar.

Though manufacturing was a major financial contributor to the economy, this sector was severely affected in the late 1990’s, when several companies moved to lower cost Asian economies.

Today, tourism is far and a way the main revenue earner in Barbados. Provisional Barbados Central Bank figures indicate that in 2007, the sector earned about $172 million out of GDP that was estimated at $1.15 billion. By comparison, manufacturing accounted for about $64 million and agriculture, including sugar, about $50 million.

Sugar and rum are the two manufactured products which together earn the island’s most foreign exchange.

For the first eight months of 2007 the two combined accounted for about a quarter of the BDS$336.9 million dollars in export income. Rum brought in $43.8 million and sugar $37.3 million.

Manufacturing in Barbados centres mainly on light industry. This includes the production of cement and its by-products, clay tiles, garments and textiles, paint, paper products, furniture, electronic components, chemicals, edible oils, soap and food products.